British music boss: we should have embraced Napster

The head of UK music trade group BPI says that the major labels made a mistake …

Geoff Taylor, head of UK major label trade group BPI, wrote an op-ed piece for the BBC today in which he called Napster the "Rosetta Stone of digital music," said it was "simple to understand and use," and said that the music industry should have "embraced Napster rather than fighting it."

While this might sound radical, it's not actually a controversial position among major label executives anymore—a top RIAA executive said the same things to me last week at the Jammie Thomas-Rasset trial in Minnesota.

More interesting is the rationale for why such a deal never got done. If Napster was truly the "Rosetta Stone" that unlocked the mysteries of digital online distribution, why was it sued out of existence?

According to Taylor, the world of 1999 wasn't ready for such a deal. "To make music fully and legally available on the internet meant clearing the rights in millions of tracks for a huge number of countries," he said, "agreeing how the revenue should be shared, implementing workable DRM (which everyone considered fundamental at the time), developing technology to track all the downloads for royalty purposes, as well as creating a quality user experience people would pay for."

Napster famously didn't bother about those things, and when it finally did get around to talking to the labels about actually compensating them and their artists for all that music being traded, the industry was insulted by the amounts offered.

Napster wasn't "prepared to pay fair royalties or to partner in a business model that could sustain investment in new music," said Taylor. That's too bad, since otherwise everything would have worked out great and we would now be living in a blanket-licensed digital music paradise.

Or would we?

Revisionist history

The record industry's Napster epiphany certainly came late. Steve Knopper, who wrote about the industry's tortured shift to online distribution in the recent book Appetite for Self-Destruction (read our review), notes the resistance of the labels to services like Napster back in 1999-2000.

Liquid Audio, for instance, was trying to launch a DRM-protected music service years before iTunes. As Liquid Audio exec Gerry Kearby tells the story, "One day in a moment of pure honesty, [a Sony rep] said, 'Look, Kearby, my job is to keep you down. We don't ever want you to succeed.' Some of them were more interested in experimenting than others, there's no doubt about it. But they were, in effect, buggy-whip manufacturers, trying to keep the auto at bay as long as they could."

Napster, with its uncontrolled P2P distribution and no DRM, was even more unlikely to reach a deal with the labels, regardless of the money on the table.

And far from using Napster as a "Rosetta Stone" that helped them understand the online market, major labels instead launched terrible music services like PressPlay to control the distribution of DRMed music themselves.

At this point, it's all ancient history. The interesting question is, ten years after Napster, why has no similar, legal service been offered if the music biz recognizes its Napster mistake? Only in the last year are we starting to see services like Qtrax and Nokia's Comes With Music and the new UK program that offers Universal's music to ISP customers.

None of these are truly like Napster, and the fact that a Napster-style service has still not been legally licensed suggests that it certainly wouldn't have been licensed 10 years ago, either, back when labels were screaming for DRM and higher up-front payments from music startups.

Taylor is right to note that music has loosened its grip, has dropped most DRM, and is willing to license to all sorts of innovative services. Music has gotten over its fear of the online world. Had that been true a decade ago (and had Napster truly been willing to do a workable deal), where might we be today?

iTunes does work just fine, the only thing it lacks is the p2p element. I don't see that as a draw anyway, as the iTMS download servers are consistently very fast for that feeling of instant gratification.

Funny how the recording industry now talks as if this whole DRM-free digital distribution is a great idea and they love us all. Bollocks.

They supposedly used DRM-free music as a bargaining chip to force Apple, for example, to introduce tiered pricing. Whilst the truth may be under NDA, it certainly appears that way.

At the end of the day, they're bastards out to make a buck. Don't let any fuzzy friendly stuff make you think otherwise.

Um, the world, for Geoff Taylor, only seems to include large, multinational, music licensing organizations.

Hell, those same organizations think they are ahead, because they got Apple to let them charge $1.29 for songs. So far, profit per song is up, because they pay the musicians and songwriters a fixed fee per song (minus a percentage for "loss/theft" still), but they make less actual money because overall sales of the more expensive songs are lower.

The music industry has fought every new technology that came to recorded music each time. Starting big time with audio cassettes, DAT, CD, CD Players Napster etc… And movies are too now. Having learned nothing from BTEA, VHS wars but with the ultimate benefit of profits due to people BUYING VHS tapes. Then the movie industry tried to stopo laser discs (the market took care of them for it)

They succeed in spite of themselves. Why? Really because most people are honest and pay. Even when the music industry sues it's customers.

Napster was ok, but I still pine for the old AllofMP3.com. Great selection, good interface, DRM free and I got to choose the bit rate. Payment was bandwidth based which reflected paying more for higher quality tracks. Rates were far to low, but they offered exactly what I was looking for.

The only reason why reps are saying stuff like this is now in the age of Encrypted Torrents with trusted peers, Darknets, etc it's harder then ever to stamp out piracy. Maybe too late they realized they've engaged in an unwinnable software arms race.

The major label's shitty music isn't worth 15 bucks a CD and until they realize this they're fucked.

Originally posted by smallstepforman:"The interesting question is, ten years after Napster, why has no similar, legal service been offered if the music biz recognizes its Napster mistake?"

Ever hear of iTunes?

Rhapsody would be a better comparison in that you could get any amount of songs with no change in the cost you pay monthly. It of course comes with more restrictions and a worse (at scaling) distribution system but iTunes is pay per download which does have a big difference in how many of the song that you might not mind having but don't really want to pay for except having access to get without extra charge category you decide to get.

The thing that would be good about Napser the way it was and if had the music industries support is it literally is the best distribution model you could have. You could have the scaling of peer to peer and what napser needed the most, which was being able to say definitively this is the original audio track you wanted so users would know songs were a quality recording of the proper song and did not contain viruses.

Originally posted by apmonte:Napster was ok, but I still pine for the old AllofMP3.com. Great selection, good interface, DRM free and I got to choose the bit rate. Payment was bandwidth based which reflected paying more for higher quality tracks. Rates were far to low, but they offered exactly what I was looking for.

They still exist but in the form of mp3sparks.com. They even transferred my old allofmp3 account and remaining credit over. Agree with te notion that it's too cheap. What it does is allow codec and bitrate selection, and you pay for the amount of data downloaded (so better quality costs a little more). Best model in principle (now to actually pay the artists)

The major labels should have brokered a deal with Napster ... right ... except the deal they describe bears no resemblance to how Napster actually worked. You can't just layer DRM and subscription fees on top of Napster or you end up with the Napster of today which almost nobody uses.

People were ready for Napster and embraced it with more than open arms. However, what people can do is what scares groups like RIAA, BPI, and all the other overbearing "You can't do that with our stuff!" organizations that hate their customers.

Originally posted by smallstepforman:"The interesting question is, ten years after Napster, why has no similar, legal service been offered if the music biz recognizes its Napster mistake?"

Ever hear of iTunes?

iTunes fought tooth and nail to keep it's DRM, and only gave it up when the labels offered DRM-free licencing to the likes of Amazon (as leverage to get the teired pricing iTunes eventually caved to and brought in). The labels only offered DRM-free licencing to the likes of Amazon because they were losing so much money on their DRM-laden services and copyright infringing P2P.

iTunes is an example of near-enough-is-good-enough, not an example of open, DRM-free, P2P goodness. If iTunes wasn't backed by Apple's money and legal teams, they'd have gone the way of Napster, too.

Originally posted by Dark Empath:iTunes fought tooth and nail to keep it's DRM, and only gave it up when the labels offered DRM-free licencing to the likes of Amazon (as leverage to get the teired pricing iTunes eventually caved to and brought in).

Actually, Apple fought tooth and nail to keep iTunes' 99¢ price on every song. The labels were the ones who caved on the DRM issue in order to pressure Apple.

"To make music fully and legally available on the internet meant clearing the rights in millions of tracks for a huge number of countries,"

The little empires in each country are exactly what the problem is. The moment I can't buy music from whereever I like is the moment you've lost a customer (I'm looking at you Amazon.com and Amazon.co.uk).

If the artist is from the US and signed to an US label I should have to deal with the US label selling their music to me, not some stupid construction that delays album release times and hands over money to middlemen who do exactly Juliet Sierra in the case of downloading music.

Originally posted by Dark Empath:iTunes fought tooth and nail to keep it's DRM, and only gave it up when the labels offered DRM-free licencing to the likes of Amazon (as leverage to get the teired pricing iTunes eventually caved to and brought in).

Actually, Apple fought tooth and nail to keep iTunes' 99¢ price on every song. The labels were the ones who caved on the DRM issue in order to pressure Apple.

I can see why you'd say that (most people do), but Apple loves it's DRM. Whereas everybody else was happy licence theirs to whoever wanted it, Apple used it's DRM to lock people into the iPod. Every other manufacturer was excluded.

They used the excuse that they needed Fairplay to be secure (security through obscurity), but Fairplay was cracked more times than any other PMP DRM, so we know obscurity wasn't doing it any favours. It was all about lock in (just ask Norway).

But besides that, yes, I agree, Apple enjoyed bossing the labels around with it's 99¢ flat rate. Too bad for Apple they lost both their beloved DRM and their single teir pricing. Great for us, though

Originally posted by Hak Foo:One thing that hamstrings any music service is that you have to care about the business behind the music. "Oh, Band X is on Label Y, who only has an arrangement with Service Z."

++!

This is something I never understood - the labels (particularly Sony, the most arogant company since Monsanto) felt people cared about them, not the music. Sony would push their products in their music videos (sexy girls listening to discmans/PMPs, sexy young boys playing Playstaion), then they'd be surprised people didn't want to puchase Sony movies in UMD as well as DVD. They'd be surprised their online shop wasn't where everyone wanted to go for all their music needs.

Like the other day went I went to a comic book store to see if the next edition of "Werewolves on the Moon" had come out, and the guy behind the counter asked "Is that Dark Horse?" How would I know? I'm after the comic, not the brand.

Music isn't like cars - where you get people that want a Volkswagen, and after the fact decide on a Golf or Passat. Nobody but the labels care who is signed with who. If I can't get what I want with you, I won't use you for anything.

Originally posted by fletc3her:The major labels should have brokered a deal with Napster ... right ... except the deal they describe bears no resemblance to how Napster actually worked. You can't just layer DRM and subscription fees on top of Napster or you end up with the Napster of today which almost nobody uses.

Napster wasn't in it just for kicks, their investors believed that by monopolizing P2P downloads, they could cut a lucrative deal with the record companies. Perhaps that wouldn't have worked, but that was always the intent.

Bullshit. If you make a statement like this back it up. You think it should be obvious that they love DRM because it locks people to their device but that doesn't make it true.

The DRM-less iTunes has not hurt them as of now. But they have many more customers buying their DRM free tracks. Obviously the DRM free tracks have not resulted in people buying Zunes instead of iPods so the argument that they love DRM because it locks people to their device is pretty bad.

Originally posted by darkowl:iTunes does work just fine, the only thing it lacks is the p2p element. I don't see that as a draw anyway, as the iTMS download servers are consistently very fast for that feeling of instant gratification.

Yes, too bad you still need specialized software to access it. With Napster and other P2P networks, it made sense, since it was something new. Apple is selling music files from a central server and any web browser can handle that. So why can't you browse and buy from iTunes with just a web browser? Why do you still need special software installed on your system to buy "DRM-free" songs?

http://www.spotify.com is actually a very good service. But they are continuing to shoot themselves in the leg, with different availability in different markets. I understand that it takes a while to sort out royalty for each country in the world. But my humble definition of "a while" is certanly on par or lower than 10 years !

Originally posted by JournalBot:The head of UK music trade group BPI says that the major labels made a mistake by not doing a deal with Napster a decade ago. Such a deal was never going to happen, but what kind of world might we be living in now if it had?

Originally posted by bzzlink:http://www.spotify.com is actually a very good service. But they are continuing to shoot themselves in the leg, with different availability in different markets. I understand that it takes a while to sort out royalty for each country in the world. But my humble definition of "a while" is certanly on par or lower than 10 years !

I have a friend who works for one of the Big 4, trust me, these issues of regional clearances take a loooong time to sort out, and there's no easy way around it. The whole music industry, especially its contracts and agreeements, are not structured well for an online world. Trying to move the industry's existing model online for a service like Spotify is excruciatingly difficult.

Originally posted by darkowl:iTunes does work just fine, the only thing it lacks is the p2p element. I don't see that as a draw anyway, as the iTMS download servers are consistently very fast for that feeling of instant gratification.

Yes, too bad you still need specialized software to access it. With Napster and other P2P networks, it made sense, since it was something new. Apple is selling music files from a central server and any web browser can handle that. So why can't you browse and buy from iTunes with just a web browser? Why do you still need special software installed on your system to buy "DRM-free" songs?

I guess it's specialized in the way that the Amazon Downloader is specialized. Or the LaLa downloader. Or in the way that you have to have a music player to listen to music is specialized.

I think that the biggest reason the the labels shit themselves when things like napster came along is that you could buy single songs rather than the albums. One of the biggest money draws is these premanufactured pop princesses, these flash in the pan pretty boy singers that cannot manage to pull off more than 1 or 2 good songs per album. They used to be able to get 15-20 bucks for that shit because these poor deranged kids felt the need to own the drivel and you could not buy just the song you wanted. You ended up with 12 shitty tracks and 1 you actually wanted. Fortunately my taste in music puts me in a place where 99% of my music buys are bands that produce entire albums that are good. Of course I can get those from Amazon for 10 bucks so its win-win for me.

I know it is a pipe dream, but it would be nice if the digital music revolution would put an end to the prefabricated pop superstars and force the record companies to find real singers rather than a pretty face with a smoking body that can get by with autotuning.

I think Apple actually did enjoy it's DRM's effect on the iPod at least in the beginning when they were still trying to get the big market share they have today. Most people know that they can strip the DRM if you burned it on a CD and rip it again all from iTunes, so it's not like it's this unbreakable thing. However, by the time Steve Jobs told the world that they "don't really want DRM" but it is forced on them, they already have the head start they needed for the iPod, there was no need to keep their DRM anymore.

And also when Apple decided to allow the labels to have tiered pricing, it was not a win for us. I'd rather have every song at 99 cents than some higher and some lower. And now all services are that way, even Amazon.

And the people complaining that the iTunes is a specialized downloader, well of course it is. It's the way Apple always thinks: how do we make it easy to do this? Sure, we geeky kind hates having everything done for us, but iTunes was made so it was easy to download, rip, burn, play, and manage your music right from a single program. Sure you can do all of those things with a separate program but that's the point of iTunes, you don't have to.

Finally this music boss is kidding himself. Napster was such a change from the way they thought, they never would have accepted it in a million years. The whole reason it was so popular was not just that it was easy to find pretty much everything but the obscure stuff, it was free! Sure people are willing to pay for something that is reasonably priced, but the price of free was what made it popular.

Back in the 1980s it looked like the Burmese junta was collapsing, and the nation was on its way to democracy and openness. A friend of mine just had to visit. He had always wanted to see Burma, and for him, this was his big chance. He was sure that the window would close, and Burma would revert to its closed ways. He was right, but he got to see Burma.

Napster was a lot like that. Suddenly, it had all the music you might want including obscure songs that had been out of print for decades. Sure, I could have spent my time searching used record stores and badgering dealeres, but suddenly, everything was right there. It was amazing. I would have gladly paid for the music, but there was no mechanism for it. So, I got to listen to some long lost music, and then the darkness came again.

I'm hoping that Google books creates some kind of model for distributing out of print works. They are mainly concerned with books, since the book publishers are way behind the music people and might be reasonable. Still, there are anti-trust issues and the like, but we need to let people distribute music as long as they pay the rights owners. Maybe they could even throw in a tip jar for the actual musicians, lyricists and creative team.

Originally posted by [Fuzzy]:I guess it's specialized in the way that the Amazon Downloader is specialized. Or the LaLa downloader. Or in the way that you have to have a music player to listen to music is specialized.

With the exception of that last example (the fact that you said "a music player" instead of a specific product is a dead giveaway), yes, you're right, those are specialized apps.

Ideally, I'd like to see music stores provide a web-based store and an API to integrate with the music program of your choice. I'd love to browse any music store I wish no matter my choice of music software (Winamp, Foobar2000, MediaMonkey, Amarok, whatever).

How is allowing others to copy your music collection a business model? Sure, anything could be a business model if you slap a banner ad ridden interface on it (i.e. Napster), but where do you put the interface if you are just copying a 2TB hard drive to another hard drive? You don't even really need a PC to do that anymore.

mjdlight - I have a friend who works for one of the Big 4, trust me, these issues of regional clearances take a loooong time to sort out, and there's no easy way around it. The whole music industry, especially its contracts and agreeements, are not structured well for an online world. Trying to move the industry's existing model online for a service like Spotify is excruciatingly difficult.

It's even harder when you don't try. The music industry has apparently had many, many opportunites tossed into their laps and in all cases acted more like it was a hot iron than an opportunity.

DRM Free Lossless albums at $5 below the store CD price and the music is available world wide on the first day rather than delays - is that really too much to ask? am I being unreasonable? I don't think I am.

The mistake of not embracing Napster is incidental to the mistake of being evil, greedy, shortsighted twats. And, they still are. No cure, and the only treatment is to make them unemployed evil, greedy.....

Didn't the guys that ran napster make a boatload of money (before they were sued into oblivion)? And give that it was just with adds cuz the music was free, I would think that if the record companies were smart they would have found a way to negotiate a cut, or buy the program outright. Then they could be making boatloads of money from just the ads. But since they got stupid and sued them how many others have popped up. That's a problem, they really should have made use of napster because at the time everybody was using it.

Originally posted by Civ2boss:I think Apple actually did enjoy it's DRM's effect on the iPod at least in the beginning when they were still trying to get the big market share they have today. . . . by the time Steve Jobs told the world that they "don't really want DRM" but it is forced on them, they already have the head start they needed for the iPod, there was no need to keep their DRM anymore.

Apple reported a 65% market share for the iPod in January 2005. Let's say that's good enough to consider them established. The iTunes store opened in April 2003, and iTunes was first released for Windows in October 2003. You're suggesting that, in that period of less than two years, a significant number of people:

1) Bought a lot of music from the iTunes store2) Decided to buy a music player (probably a *second* music player, since #1 already happened)3) Wanted to buy another brand but settled for an iPod because it could play their DRMed music

If you look at the sales graph (link below), it seems pretty clear that's not what happened -- most iPod buyers must have been first-time buyers, which means they probably were entirely new to the platform, so DRM lock-in was not a factor in their purchase.